The Process of an IRS Audit - What to Do and How to Get Through It
Although most of us worry about what would happen if the IRS knocked on our door asking for tax records, only a small percentage of Americans will ever be audited. But what if you ended up being one of these select few? It is probably a good idea to seek out professional tax advice if you are audited. However, if you choose not to go this route then there are things you should know and do to help you get through the process.
The first thing to do is to respond and quickly. In most instances you have 30 days to address and respond to the audit notification without penalty. Such penalties often include bills sent to you. Next, information recognition is essential. The IRS notice will inform you of what is being looked at in the audit. It is important to read the notice carefully as knowing and understanding what is being examined will allow you bring the necessary materials with you to the audit. Don't bother bringing materials or information that isn't relevant to what is in question. There is no reason to give the auditor more information than they have asked for, this can only hurt you or cause more issues.
Once you have collected the relevant information and documents, try to put them together in the proper order. This will speed up the process, which is in the best interest of you and the auditor as well. It is also important that you fill in any gaps in your records. If you are missing documents make sure to get copies of them because it is your responsibility to prove the authenticity of your deductions and such. In addition, providing a full and accurate accounting of your records will get you off on the right foot with the auditor, as opposed to having to explain discrepancies or missing information.
Another important thing to remember is that you have to take responsibility for your materials. The IRS is not responsible for what you provide them and thus it is wise to bring copies to the auditor rather than originals so that you can maintain the required documents for your personal records. Don't rely on the IRS to look out for your interests or inconvenience because they likely may not.
Lastly, if you have a disagreement with the IRS official that cannot be worked out then appealing the decision is a possibility. However, it is important to recognize that appeals officials will likely be more knowledgeable and senior than the agent you dealt with. Hence both in terms of time and complication it is probably a good idea to try to figure out any problems with the original agent without having to go through the process of an appeal.
Hopefully these tips will help you get through the audit process if you choose to go it alone without the help of a tax professional.